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Indonesia places a $28bn bet on free school meals

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Indonesia places a bn bet on free school meals

This article is part of the FT’s Financial Literacy and Inclusion Campaign joint seasonal appeal with Magic Breakfast

Before dawn in the highlands of West Java, dozens of kitchen staff are hard at work making free meals for more than 3,000 schoolchildren in the Indonesian town of Warungkiara.

From 3am, as rain pours outside, employees arrive at a kitchen in a one-storey building to chop and cook hundreds of kilogrammes of fruit, vegetables, rice and eggs. From about 7am, when the town’s children start heading to schools, the kitchen is ready to begin distributing food to students.

Warungkiara’s kitchen is a pilot project. Thousands like it will be rolled out across the country beginning this month as part of President Prabowo Subianto’s flagship programme to provide free lunch for all school children and pregnant mothers. 

Fully implemented, it will be one of the world’s largest free meals programmes, reaching more than 82mn people at an estimated cost of $28bn a year.

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It is a sum expected to strain Indonesia’s already-stretched government finances. But Prabowo, who took office in October, has touted the programme as a solution to improve children’s nutrition and boost local economies — which he hopes will have a ripple effect on economic growth and development in the world’s fourth most-populous country.

“This is a long-term investment in human capital,” said Dadan Hindayana, head of the newly created national nutrition agency, which will oversee the free meals programme. 

“Children who have never seen balanced meals will get to enjoy [such meals] at least once a day, every day. It will impact their growth,” he told the Financial Times in an interview in Jakarta. 

Nasrudin, a field co-ordinator for the free nutritious meal programme © Mas Agung Wilis Yudha Baskoro/FT
Yuni Munggaranti stands in the kitchen, holding a tray with compartments containing various food items.
Yuni Munggaranti, a nutritionist working with the programme © Mas Agung Wilis Yudha Baskoro/FT

Dadan also said the programme would boost productivity across Indonesia as the government increases sourcing of food products.

That could help Prabowo meet his ambitious goal of boosting annual growth from 5 per cent to 8 per cent — though economists say other reforms and investments are also needed.

Prabowo promised the free lunches during his election campaign, but the pledge was dismissed by critics as a populist measure. However, others say there are real benefits, particularly for children’s health and academic performance.

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Stunting — impaired growth and development in children from poor nutrition and repeated infections — has been an issue in Indonesia for decades. Government data shows the prevalence of stunting dropped from 37 per cent in 2013 to 21.5 per cent in 2023, but it remains a problem with longer-term impact. 

The OECD says stunting can lead to lasting impairments to physical and cognitive abilities, as well as disadvantages for health, life expectancy, skills and jobs.

It says infant malnutrition has contributed to poor education performance in primary schools: in 2022 as in previous years, Indonesian students scored significantly worse than the OECD averages in mathematics, reading and science.

The free lunch programme, along with other efforts, “will better prepare children for learning and growing”, the OECD said in a report in November.

A worker in a test kitchen prepares meals by distributing a mixture, possibly scrambled eggs, into compartmentalised trays
The kitchen feeds about 3,000 students every day © Mas Agung Wilis Yudha Baskoro/FT

The pilot project at Warungkiara, a town of 66,000, got under way shortly before Prabowo won February’s presidential election, and illustrates the kind of social and economic impact that the government hopes to trigger. 

Run by a think-tank called Indonesia Food Security Review, which is advising the government on how to implement the programme nationally, it employs about 50 people including cooks, drivers and cleaners. It distributes meals to 20 schools, six days a week. A nutritionist helps design the meals.

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Pahmi Idris, the kitchen manager, said the pilot project had created local jobs and boosted income for staff who were previously housewives, unemployed or worked in the informal sector. All produce is sourced from local farmers and suppliers, Pahmi said.

“Locals who previously did not have income now work here,” he told the FT. Farmers, hawkers and small retailers in the town have seen their income double and farmers are expanding to meet the kitchen’s demand, he added. 

Fahmi Idris stands in a kitchen in Warungkiara Village
Kitchen manager Pahmi Idris: ‘Locals who previously did not have income now work here’ © Mas Agung Wilis Yudha Baskoro

Schools that receive the free meals also said they had seen an improvement in attendance.

“Over time, the absence rate has been decreasing. This also influences the learning process,” said Iswah Ismatullah, principal at the Himmatussalam Islamic high school, which has 109 students.

Primary school head Atmaja, who goes by one name, said some students take a portion of the free meals home to share with siblings or their parents, most of whom are farmers or do odd jobs. 

The Warungkiara kitchen is seen as the benchmark for the programme’s national rollout, but expansion across the vast archipelago of 17,000 islands will face many challenges.

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Indonesia will have to avoid the pitfalls seen in India, which runs the world’s largest free meals programme, catering to 118mn students. Indian government officials and others say the programme has been mismanaged in some places.

Setting up kitchens, sourcing food and distribution in some remote islands could also prove difficult. Dadan from the national nutrition agency said the government could rope in the police, military and non-governmental organisations to help. Indonesia plans to set up nearly 30,000 kitchens, each serving about 3,000 students, when the programme reaches full scale by 2027.

“This is a massive programme that will need the involvement of all parties,” he said.

Two young students smile and enjoy a free lunch
Students at Warungkiara have a free lunch of noodles and vegetables © Mas Agung Wilis Yudha Baskoro/FT

Another big hurdle is finance. An average meal is expected to cost Rp10,000 per day, and the total $28bn cost is expected to include setting up the kitchens and other operational costs.

Indonesia has budgeted Rp71tn ($4bn) for the first year of the programme, but expanding it will test Jakarta’s fiscal strength. Rating agencies say more borrowing could hurt the country’s credit rating.

“The gradual rollout of the free meal programme may add to some recent pressures on Indonesia’s government finances,” said Thomas Rookmaaker, head of Asia-Pacific sovereigns at Fitch Ratings.

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On a recent visit to China, Prabowo signed an agreement with Beijing to support funding for the programme, though the governments did not provide details. 

Any fiscal strains are a distant concern in Warungkiara. Eneng, who works in the pilot kitchen, said the programme had helped increase her family’s income.

“This (kitchen] really helps. The women around here previously did not have any income. Now that we’re working here, we can help our husbands and children,” she said, peeling garlic along with other women in preparation for the next day’s meals.

“As for our children, we are assured that they will have healthy meals. It gives parents peace of mind.”

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Constellation Energy in talks to buy Calpine in near-$30bn US power sector deal

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Constellation Energy in talks to buy Calpine in near-bn US power sector deal

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Constellation Energy is in advanced talks to acquire Calpine in a deal valued at up to $30bn, in what could be one of the largest takeovers in the power generation industry, according to people familiar with the matter.

The acquisition of Calpine would also generate a huge windfall for its private equity investors Energy Capital Partners, CPP Investments and Access Industries, who acquired it in 2017 for $17bn including debt.

One person with knowledge of the talks said a deal could be finalised within days and value Calpine at close to $30bn, including debt, making it one of the largest US power and utility deals.

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The takeover talks come amid an unprecedented surge in power demand forecasts linked to the rollout of artificial intelligence data centres and reshoring of manufacturing activities, which has caused shares in Baltimore-based utility Constellation to more than double in value over the past year. Constellation shares fell as much as 10 per cent on news of the talks before recovering slightly to close 4.6 per cent lower.

The US electricity system is grappling with a historic rise in power demand after two decades of negligible growth. Consulting firm ICF expects the country’s power consumption to grow by nearly 20 per cent by 2033.

Expectations of surging power demand have been a boon for cheap natural gas-fired generation, which unlike solar and wind is available around the clock. GE Vernova, the largest gas turbine manufacturer, expects orders to have nearly doubled last year. 

Calpine operates a fleet of 78 gas plants and other energy facilities across the US, which generate enough electricity to power about 27mn homes.  

Constellation operates the largest fleet of conventional nuclear reactors in the US and last year announced it planned to reopen the Three Mile Island nuclear plant in Pennsylvania.

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The proposed deal indicates Constellation was seeking to complement its nuclear holdings with a large-scale gas fleet “to meet the increasing demand from the growing data centre industry”, said Andrew Gillick, a managing director at energy consultancy Enverus.

Another person with direct knowledge of the matter said a deal could be announced as early as this month.

Consulting firm PwC is forecasting an increase in fossil fuel generation deals under a Republican-controlled White House and Congress, which are expected to promote development of oil and gas projects.

Constellation Energy and Calpine did not immediately respond to requests for comment. Bloomberg first reported news of the talks.

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What’s in Trump’s request to block sentencing in Stormy Daniels hush money case in NY?

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What’s in Trump’s request to block sentencing in Stormy Daniels hush money case in NY?
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Incoming president Donald Trump has asked for an emergency order from the Supreme Court asking to block his sentencing scheduled for Friday, Jan. 10 in his New York hush money criminal case. Trump was convicted of falsifying business records to hide payments to Stormy Daniels, an adult film actress, made ahead of the 2016 presidential election.

New York appellate court Associate Judge Ellen Gesmer previously rejected Trump’s request to postpone the sentencing Tuesday, Jan. 7.

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What’s in Trump’s argument to block sentencing in NY hush money case?

According to court documents, Trump cited NY Supreme Court’s rulings on presidential immunity are causing “ongoing, irreparable” harm by depriving the president-elect “of his constitutional rights.”

That court “wrongly denied” Trump’s pending motion to dismiss the criminal case based on presidential immunity, according to the U.S. Supreme Court filing.

In July 2024, the U.S. Supreme Court ruled “official” acts taken by a president are protected from criminal prosecution but not steps he took as a candidate.

Trump, the first president — former or current — to be criminally charged, argued he can’t be prosecuted for actions he took in his official capacity during his administration, an extension of the reasoning the Supreme Court used in 1982 when it barred civil suits against a president for official actions.

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Otherwise, Trump’s attorneys argued, the threat of future prosecution and imprisonment would destroy the strength and authority of the presidency by subjecting them to politically motivated prosecutions, language used in the recent U.S. Supreme Court filing.

“President Trump promptly filed an interlocutory appeal and notified the trial court that it is subject to anautomatic stay, but the New York courts have erroneously refused to honor that stay,” the filing states, with Trump seeking ” … the dismissal of the District Attorney’s politically motivated prosecution that was flawed from the very beginning.”

Justice Sonia Sotomayor, who handles emergency appeals from New York, directed prosecutors with the office of Manhattan District Attorney Alvin Bragg to respond to Trump’s request by 10 a.m. Thursday, Jan. 9.

Contributing: USA Today.

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Two Friends’ Rush to Save a Pacific Palisades Family Home From the Fire

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Two Friends’ Rush to Save a Pacific Palisades Family Home From the Fire

It seemed as if the sky was raining fire on Orly Israel’s home. With embers whipping through the air, trees blazing and alarms blaring, Mr. Israel raced through the yard, hosing down bushes in a desperate attempt to save the house.

Mr. Israel, 30, had returned to the house in the Alphabet Streets neighborhood of Pacific Palisades on Tuesday evening with a friend after evacuating that morning with his brother and parents. “You could see it from the bedroom window,” he said of their view from the house on Tuesday morning. “You could see the flames coming down the hill.”

Ordered to evacuate, his family rushed to pack the cars with their most precious possessions — books, memories, a crate of notebooks and journals for Mr. Israel. “The embers were just flying through the sky,” said Mr. Israel, who said he moved into the house on his 10th birthday.

After leaving, Mr. Israel and a friend watched from a distant vantage point as the fire approached his family’s neighborhood. They decided to go back to try to protect the house, driving through “thick and black” smoke that limited their visibility to several feet.

Wearing swimming pool goggles and N-95 masks, they sprayed down spot fires and moved flammable furniture inside. But the intense heat and swirling embers pushed them back.

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“It wasn’t even safe being there at all,” said Mr. Israel.

“His whole backyard was basically on fire,” said Mr. Israel’s friend, Tanner Charles Schaaf, a content creator who chases storms. But he had never seen anything like this before, he said.

“I just stood there and was like, it’s over,” Mr. Schaaf said. “We can’t fight it.” He recorded a video and prayed as the two men gave up their efforts and ran out the front door into an apocalyptic-looking night.

As they fled the house, Mr. Israel saw a large tree with flames licking its trunk in the front yard. “When that tree falls, it’s going to destroy our house,” he said. In videos sent by other friends in the neighborhood, he said, it looked like every home on the street was on fire.

“I’m thinking about my family. I’m thinking that any future plans I had that are totally out the window,” he said, adding that he had felt unprepared for the ferocity of the fire. Hours later, he said, his eyes were still stinging from the embers, and he didn’t know what his family would do next.

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“It’s just, wait for the bad news that the house is completely gone, and then wait until they let us come pick through the rubble,” he said. “And then, I don’t know. I have no idea. Do I move to another state where they don’t have fires?”

“What happens to the city?” he added. “Neighborhoods are going to be completely gone.”

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